It's hard to deny just how forward-thinking Upstart (UPST +4.07%) is. The innovative enterprise developed a completely new credit-assessment tool that leverages artificial intelligence to give more borrowers access to loans. It's a true pioneer within the financial services industry.
Long-term investors haven't reaped the rewards from this disruptive business model, however. You won't believe how much a $1,000 investment in this fintech stock five years ago is worth today.
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Since late March 2021, Upstart's stock price has tanked 79% (as of March 20). If you had been unfortunate enough to have purchased $1,000 worth of shares back then, you'd have just $214 today. This has been an extremely disappointing investment opportunity with heightened levels of volatility.
Upstart benefited greatly from the ultra-low interest rate environment during the depths of the COVID-19 pandemic, which boosted growth. But the company struggled when rates increased. In 2025, though, its top line was up 64% year over year, as things stabilized.
NASDAQ: UPST
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The challenge with owning Upstart is that its financial performance is highly cyclical, as there is a strong dependence on favorable macro conditions. The business has a choppy history. Besides inconsistent revenue growth, getting to durable profitability is still very much a huge question mark.
Even with the stock trading at what appears to be a cheap valuation, Upstart is a high-risk bet.
